Tabreed Q4 net profit more than doubles

Dubai, February 1, 2012

UAE utility firm Tabreed's fourth-quarter net profit more than doubled, backed by strong performance at its core chilled water business and an increase in total capacity.

Dubai-listed Tabreed, which received funding from state-owned fund Mubadala to restructure debt last year, saw quarterly profit rise to Dh52.9 million ($14.40 million) from Dh21.1 million ($5.75 million) year-ago, according to Reuters calculations.

Reuters calculated the fourth quarter profit from previous financial statements. The company reported a net profit of Dh129.8 million ($35.35 million) for the nine-month period ending September 30, 2011.

Tabreed's full-year net profit rose 34 per cent to Dh182.7 million ($49.74 million), the company said in a statement.

Group revenues rose 9 percent to Dh1.1 billion ($0.30 billion), with its main chilled water division accounting for Dh943.8 million ($257 million) of the overall revenues.

Commenting on the results, Tabreed’s chairman Waleed Al Mokarrab Al Muhairi, said: “Our full year performance, in particular our revenue growth and significantly increased profitability, demonstrates the success of our strategy of focusing on the chilled water business, improving operational efficiencies and applying stricter cost discipline across the business.'

'Our strategy will remain constant in the year ahead as we complete our build-out program and build upon the notable achievements of 2011,' Al Muhairi stated.

'Our stakeholders recognise district cooling as a vital utility because of the energy efficient, cost-effective and reliable cooling it provides,' he said.

'As the partner of choice for leading institutions, Tabreed will capitalise on future demand for cooling that will be driven by the continued investment in and diversification of the Abu Dhabi and other regional economies,” he added.

Tabreed CEO Sujit S Parhar said: 'As these results demonstrate, the company has a solid fundamental business model driven by its core chilled water business, underpinned by its strict cost discipline and continuously improving organisational efficiencies.'

The company said it added 11 plants during 2011 and an additional 8 per cent in overall capacity.

Tabreed is among several Gulf companies which has had to restructure its debt after an economic boom, fuelled by record-high oil prices and easy credit, ended abruptly and caused a property market crash.

In March 2011, Tabreed secured an extra Dh3.1 billion ($0.84 billion) funding from state fund Mubadala, helping it to tackle its debt pile.

Its debt-to-equity ratio stood at 0.93 per cent at the end of 2011, compared to 3.15 per cent at the end of the previous year.

Mubadala currently owns 27.3 per cent of Tabreed.

Tabreed shares have risen 9.5 per cent year-to-date. They had fallen 60 per cent in the last year, according to Reuters data. – Reuters and TradeArabia News Service